The Biggest Gilt/Groupon Knockoff Network You've Never Heard Of (TCTV)

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We all know that the early success and insta-revenues of companies like Gilt Group and Groupon have inspired more clones than Jango Fett. But while profitable and growing, my impression was that most of them are one-off rounding errors compared to Groupon’s swelling revenue estimates – numbers that seem to go up in the press by $100 million every time they don’t have any real news on this story.

So imagine my surprise when I learned that Klaus Hommels was running a network of nine Gilt Group-style and seven Groupon-style companies that together makes up the third largest player in the market. The Gilt Group-esque network, called Globalsquare AG, started in less than two years ago and has a $400 million revenue run rate; the Groupon-ish network, called Group Buying Global AG, was layered on top of it and already has a $200 million revenue run rate– in less than six months.

Hommels says that his group buying companies are the largest players in terms of revenue in Australia, Brazil, Turkey, Switzerland, and top two or three in the other geographies. Collectively, they have over five million members with fifty active cities. New cities are coming online each week.

The Gilt-like sites include Beyond the Rack in Canada, Brandsclub in Brazil, Brandsclub in Mexico, Markafoni in Turkey, FashionFriends in Switzerland, Sukar in the Middle East and North Africa, KupiVIP in Russia, Fashion-and-You in India and BrandsExclusive in Australia. The group buying sites include ClickOn in Brazil, Spreets in Australia, Deals-and-You in India, Grupfoni in Turkey, Clickonero in Mexico and Argentina, Cobone in Middle East and North Africa and DeinDeal in Switzerland.

Hommels is one of the best known angel investors in Europe having invested in Facebook, Skype, Spotify, Stardoll and many other companies. But the growth of these sites’ revenues is something even he hasn’t seen before, as we discuss in the video below.

The structure is a lot different than Gilt or Groupon. Hommels has a Swiss holding company that handles the technology backend and other administrative duties, for the 18 on-the-ground sites. Those sites in turn are each run as independent companies run by meticulously recruited local entrepreneurs. Hommels argues it’s the best of both worlds: They get the professionalism, resources and scale benefits of being a big global company, not to mention shared best practices on types of promotions that work. But each entrepreneur is still incentivized to grow their business, because it’s still their business. Keeping that fire lit is a bigger challenge when a company like Groupon buys you outright, and may be even greater if those global clone sites become a tiny part of gigantic Google.